Torrential rain and floodwaters have crippled one of Victoria’s major power stations but the government maintains the state’s power supply is not under threat.

The natural disaster at Victoria’s Yallourn power station – which provides almost a quarter of the state’s power – triggered a price spike of more than 80 per cent in the market for Victoria’s electricity yesterday.

A group representing the country’s largest energy users accused the generators of profiting from the disaster.

“The [electricity] generators are obviously using this situation to try and get their prices up and generate some profits," said the executive director of the Energy Users Association of Australia, Roman Domanski. “If they can, it shows a complete lack of competition in the market."

The floodwaters in Victoria’s east forced Yallourn to shut two of its four electrical generators yesterday at a time when a third generator was already off line for maintenance.

TRUenergy, the company that runs the plant, said the Latrobe River broke its banks early yesterday morning as rising waters breached a levee at the Yallourn open-cut mine, flooding three conveyor belts that carry coal to the plant. The company now plans to truck coal to the plant, but it is not clear how long it will take to restore it to its full capacity.

The Victorian Minister for Energy and Resources,
Michael O’Brien
, moved yesterday to restore calm by insisting the state’s energy supply was not under threat. He said he had spoken to the head of the Australian Energy Market Operator, Matt Zema, who said peak energy in Victoria could hit 7500 megawatts during winter, giving the state a buffer of 1800mW.

“Victorians can have confidence that sufficient electricity is being generated to keep both the lights and the heaters on, which is very important at this time of year," Mr O’Brien said.

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That message was reinforced by Premier Ted Baillieu, who said that, although “Yallourn is one of the big providers . . . we have others".

However, Mr Domanski said the state was forecast to hit a peak of 7625mW last night.

The electricity price in Victoria spiked yesterday from a low of $21 a megawatt-hour to $118 at 5.50pm, despite largely remaining between $30 and $40 over the past month.

State opposition energy spokesman Lily D’Ambrosio warned that the problems could last for weeks and the government should be urging Victorians to restrain their energy use.

“We’re now in the second week of winter, temperatures have plummeted and that will only continue," she said.

NSW residents also face a major clean-up bill after the wild winds in the state. Insurer IAG received about 300 claims after NSW SES fielded than 1400 calls for assistance when 100 km/hour winds felled trees and damaged roofs on the south coast and in the Illawarra and Sydney.